Operating income of $3.3 million compared to a loss of $0.3 million in 2017

Net income of $2.0 million compared to a net loss of $0.5 million in 2017

Diluted EPS of $0.12

First Quarter Summary
Jim Pokluda, President and Chief Executive Officer commented, “We were pleased to post our third consecutive quarter of year-over-year revenue growth, as the upward momentum we experienced in the last half of 2017 continued into the first quarter of 2018. We believe that higher metals prices in 2018 were the primary contributors to the increase in sales. We estimate sales for our project business, which targets end markets for Utility Power Generation, Environmental Compliance, Engineering & Construction, Industrials, and Mechanical Wire Rope, increased 34%, while Maintenance, Repair, and Operations (MRO) sales were up 2% as compared to the first quarter of 2017.”

Gross margin at 24.1% increased 260 basis points from the first quarter of 2017, primarily due to higher product margins driven by ongoing pricing discipline and metals inflation. Sequentially, gross margin decreased 130 basis points, as Q4 2017 gross margin benefited from improved market conditions and associated customer and supplier rebates. Operating expenses at $17.2 million were flat with Q1 2017 and down $0.7 million sequentially. Operating expenses as a percentage of revenue decreased 150 basis points from 21.8% in Q1 2017 to 20.3% in Q1 2018.

Average debt levels for the quarter increased 13.1% from $68.0 million in 2017 to $76.9 in 2018, primarily for working capital to service higher activity levels, while the effective interest rate increased from 2.6% in 2017 to 3.3% in 2018.

The effective tax rate for the quarter was 25.9%, compared to the 35.3% level in 2017. The 2018 tax rate includes our best estimate of the impact of the 2017 Tax Cuts and Jobs Act (“the Act”).

The results of operations are a net income of $2.0 million, as compared to a net loss of $0.5 million in the same period of the prior year.

Mr. Pokluda further commented, “We are encouraged with the continued improvement in sales, the attainment of higher margin levels and our ability to maintain the level of operating expenses as activity levels continued to increase. This has resulted in the generation of the highest level of operating income since the fourth quarter of 2014.”